Adding "AI-generated" into the phrase doesn't really change much. If you make the argument of scale matters, then I think that'll also democratize art. Photography didn't put artists out of commission, it brought realism as an art form to the hands of the masses.

There's plenty of creativity left to be had post-AI. Now an entirely new class of people enter the realm of multi-disciplinary art, since they can compensate for personal deficit in side-fields.

The profits from these models go into running them. They don't fit on consumer-grade hardware.

However, I do believe that society should subsidise art, and distribute automated wealth somewhat evenly, so I don't even disagree with you. I'm from such society and it's pretty great.

"The Internet" is just other people's computers. Don't like AI content? Don't visit those sites. Not every site has ads, either. Hosting is the cheapest it's ever been. It's a curation and reputation issue.